Iran must avoid overplaying its hand

THE Iran war has entered its sixth month. It started on February 28 with US-Israeli airstrikes that killed the Iranian Supreme Leader Ali Khamenei and senior generals of the Islamic Revolutionary Guard Corps (IRGC), besides destroying several Iranian military facilities. Reportedly, the plan that Israel sold the US assumed that following the strikes, a popular uprising would depose the Islamic regime in Iran. That did not happen.

Having gained experience from similar attacks in June 2025, Iran had moved its drones and missiles into safe enclaves in mountain ranges. Consequently, the Iranians retained the ability to hit US military facilities in the GCC (Gulf Cooperation Council) countries and Israel, besides threatening US naval assets. Most significantly, Iran disrupted maritime traffic through the Strait of Hormuz, causing global oil prices to spike. Brent crude touched a maximum of $126 per barrel, impacting energy costs even in the US.

With Pakistani mediation, a ceasefire was eventually reached on June 17. The Memorandum of Understanding (MoU), however, had some general stipulations which caused fresh misunderstanding. By mid-June, the US had whittled down its demands to basically two issues: the Iranian nuclear programme and freedom of navigation in the Strait. While the nuclear issue had to be negotiated in a subsequent dialogue, the reopening of the Strait was for immediate implementation.

The US quickly began to roll back its naval blockade. Iran, on the other hand, while allowing traffic through the Strait, began charging fees from all transiting vessels. Although Iran had been demanding it during and before the negotiations, no details had been finalised. The US expected them to be decided after the initial implementation of the MoU. Iran even targeted vessels moving through Omani waters and not the route designated by it.

Consequently, the US reverted to the use of military force with air attacks on July 8, barely three weeks after the initial ceasefire. Iran retaliated by attacking US military facilities in Jordan. The fresh hostilities lasted till July 24, when the US unilaterally announced another ceasefire, which also proved to be short-lived.

The US has experimented with different ideas for a stable Gulf security order since the 1979 Iranian Revolution. The Americans and their GCC allies backed Iraq, then under Saddam Hussein, in its war against Iran (1980-88). Then came the US intervention in Kuwait in 1991 to liberate it from Iraqi occupation. But the American confrontation with radical Islam in the form of al-Qaeda resulted from its own indirect intervention in Afghanistan to eject Soviet troops, present there since December 1979.

But the US military intervention in Iraq to eject the Saddam regime in 2003 created a fresh regional power contest. It allowed Iran access to the Shia populations of Iraq, Syria and Lebanon. This formed the Shia Crescent, with Iranian influence running from its western border to the Mediterranean. The Arab Spring, a populist anti-regime uprising which started in Tunisia in 2010, spread to Libya and Egypt, eventually causing the civil war in Syria and leading to the ouster of the Assad regime.

During his first term, US President Donald Trump conceived the Abraham Accords in 2020. They envisioned the GCC countries normalising relations with Israel and creating a new security order, with Israel at its core, to contain Iranian influence. But the cardinal mistake was to assume that the Palestinian issue was ignorable. Bahrain and the UAE, and later Morocco, signed on. Saudi Arabia resisted, demanding that Israel must first declare the pathway to a Palestinian state.

The October 7, 2023, attacks on Israel by Hamas unleashed Israeli military violence on the Palestinian group as well as Gaza’s civilians. That undermined Trump’s plan. Meanwhile, Trump, having withdrawn the US from the nuclear deal between Iran and P5+1, called the Joint Comprehensive Plan of Action (JCPOA), allowed Iran to resume uranium enrichment without oversight.

The Indian government aligned with the Trumpian vision by proposing the India-Middle East-Europe Corridor, to run overland via the UAE, Saudi Arabia and Israel. The Gaza crisis stalled it.

The Iran war has created divisions among the GCC countries, with Qatar, Oman and Saudi Arabia, along with Turkey and Egypt, distrustful of the Abraham Accords members.

The two crucial issues between the US and Iran now are: the Iranian nuclear programme and the freedom of navigation in the Strait of Hormuz. The US, having abandoned the JCPOA, wants to deny Iran any uranium enrichment, even under the Additional Protocol of the International Atomic Energy Agency.

On July 22, the US signed a nuclear deal with the Saudis, allowing uranium enrichment for generating fuel for their planned nuclear reactors. The US nuclear deal (2009) with the UAE denied enrichment rights. Iran now would not settle for anything less than the Saudi deal. But the US stumped the Saudis by announcing a day later that they must normalise ties with Israel first. This was the Abraham Accords by the back door.

Why did the US loosen the nuclear norms? It was always assumed that the Saudis had financed Pakistan’s nuclear programme and thus had access to it. A formal enrichment deal perhaps would allow easier transfer of weapons technology. Is this an attempt to forestall the Iranian nuclear weapon programme by turning Saudi Arabia too into a nuclear weapon threshold state?

Iran understands that the US has electoral priorities that create time constraints. It also knows that the US threat of massive annihilation of Iranian civilian infrastructure is a bluff as Iran has threatened similar action against GCC nations. The US would not want mass disruption of economic and social life in the Gulf.

The US has a couple of options. It can militarily escalate the conflict with air and ground attacks. This risks protracting the combat and causing heavy casualties. Alternatively, it may compromise on both the nuclear and Hormuz issues. Perhaps the more permissive nuclear deal with the Saudis opens space for a JCPOA-like deal.

Regarding the Strait, Omani diplomats were in Iran on July 25-26. Oman-Iran management of the Strait may be acceptable to the GCC and thus also to the US.

Finally, if the US seeks total Iranian submission to its terms, then a naval blockade is necessary. But how long economic distress would take to make Iran bend is unpredictable. Logically, the US would prefer an early off-ramp and subtle compromise. Hopefully, Iran will not overplay its hand, considering the IRGC’s inordinate influence.